CEZ in talks with India Power on sale of Bulgarian assets, gives up deal with Inercom

CEZ in talks with India Power on sale of Bulgarian assets, gives up deal with Inercom
By bne IntelliNews February 13, 2019

Czech power company CEZ has already started talks with India Power Group on the sale of its assets in Bulgaria and has given up trying to save the deal with family-owned Inercom Group that had been blocked by the Bulgarian authorities, Dnevnik news outlet reported on February 12.

In February 2018, CEZ announced it had selected Inercom as the buyer of its Bulgarian assets, which raised serious concerns about the Bulgarian company’s ability to fund and run the assets. Adding to the controversy, Inercom was also found to be owned by a close friend of Bulgaria's energy minister.

In December, the Czech company said it will start parallel talks with India Power, but that it did not intend to give up its agreement with Inercom even though its term expired at end-November.

Now, however, CEZ has decided to give up the deal with Inercom and is trying to reach an agreement with the Indian candidate that was the second-ranked bidder. The Czech company shortlisted five companies in the sale procedure.

India Power has offered to pay €355mn within five years versus €342.4mn offered by Inercom to be paid immediately. However, according to unnamed sources from CEZ, India Power is attempting to change its offer, using the fact that Inercom is no longer a competitor.

The Indian company is part of Kanoria Foundation Trust, which unifies the businesses of the Kanoria family. Unlike Inercom it is a large concern; its value is estimated at $10bn. India Power produces wind, solar and thermal energy, and also deals with electricity distribution.

In Bulgaria, CEZ operates an electricity distribution business with 2mn customers, a retail electricity supplier, and a wholesale trader. The Varna coal-fired power plant also owned by the firm has an installed capacity of 1,265 MW., and was recently acquired by Ahmed Dogan, the chairman of honour of Bulgaria’s ethnic-Turk Movement for Rights and Freedoms (DPS). In addition, CEZ owns two renewable plants.

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